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Saturday, October 24, 2009

How should this transaction be entered into an account journal-?

Mike signed a contract with a local radio station,to provide guest spots for the next three months.The contract requires Mike to provide a guest DJ for 80 hours per month for a monthly fee of $2,400.Any additional hours beyond 80 will be billed to the radio station at $40 per hour.In accordance with the contract,Mike recieved $4,800 from the station as an advanced payment for the first two months.
How should this transaction be entered into an account journal-?
Cash 4800


unearned revenue 4800

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